How to Avoid Demurrage, Detention, and Storage
Demurrage, detention, and storage are 3 words that the team at Orbit Brokers hate to hear. These terms mean additional charges aside from freight, duties and taxes and are usually avoidable.They are all different and it is important to know what each is in order to avoid running into them. Lets address each one individually.
Storage charges are the cost associated with keeping your shipment of goods in a location beyond the location’s grace period. Each location can have their own grace period and their own fees. For example, if you keep your container at CN Brampton for more than 48 hours, you would be subject to storage charges of $200 per additional day, or part thereof. For shipments that are less than a full container load, the charges would be based on the size of the shipment. The more space your shipment takes up, the more charges it will incur per day.
Demurrage charges on the other hand, are charged by the shipping line on full container imports. These charges occur when a container is not picked up in the allotted free time. Each shipping line’s free time and cost per day varies depending on the company that owns the container. Storage and demurrage charges can both be incurred at the same time. As stated above, storage charges are charged by the company that owns the location where the goods are being stored, while demurrage charges are from the carrier typically.
Detention charges are against full containers and are also charged by the carrier. Once the container has been picked up, the clock for detention charges starts. Detention charges occur when an empty container is not returned within the allotted free time. Once that free time is up, the charges start on a per day basis. Again the amount of free time varies based on the carrier that moved the container. The carrier uses the container for other shipments so if the empty is not returned on time, they lose the ability to use that container until it is returned..
What You Can Do
The most important step that can be taken is to ensure you have sent copies of all your documents to your customs broker well in advance of the shipment’s arrival. This allows the shipment’s movements and arrival to be monitored. It also ensures the customs entry is prepared prior to arrival to facilitate more efficient service. Finally it allows all the required releases to be obtained from the shipping company as soon as possible. This simple step reduces the risk of running into additional charges.
Orbit Brokers has been handling customs clearance and freight of air, ocean and truck shipments for almost 30 years. If you are incurring charges for demurrage, detention and storage, contact us to find out how we can help.